Starting or creating a family office
How Can a Family Give Its Office Leader Enough Authority to Do the Job?
Short answer. Give the office leader written authority that matches the role's responsibilities and performance expectations. Define which decisions the leader can make, which need family approval, and how disagreements are escalated. Keep the rules in the office's governance documents and explain them to everyone who works with the leader.
A family can give its office leader enough authority by setting decision rights in writing and matching them to the leader's responsibilities. When accountability exceeds authority, work stalls and relatives may give conflicting directions.
Set the Boundaries Before Work Begins
List the decisions the leader can make independently, the matters that need approval, and the issues reserved for the family or its governing body. These may include hiring, spending, vendor engagement, investment decisions, or changes to office policy. Boundaries depend on the family's structure and needs. Document thresholds and approval steps with your attorney when legal obligations or entity documents are involved.
Write down who supervises the leader and how family members can raise requests or concerns. This helps prevent the executive from receiving separate instructions from relatives. A defined reporting line also helps the family resolve decisions beyond the leader's authority. The governance page and family compass can connect authority to the family's goals and operating rules.
Match Authority to Accountability
Review the leader's job description alongside performance goals. If the leader coordinates office work, the person needs authority to set priorities and manage that work within agreed limits. This includes work with staff and advisers. If the family expects timely results but retains every operational decision, delays are likely. Define what information the leader must provide before acting and what to report afterward.
Give the leader access to the records needed to carry out the role. This includes access to staff and external advisers. Explain what information the leader can share and with whom, particularly when sensitive family information is involved. The executive's job description should make these expectations clear to the candidate and family.
Use a Clear Process for Exceptions
Some situations will fall outside the written rules. Set an escalation path for urgent decisions, conflicts of interest, and disagreements between family members. Name who can make a temporary decision and how it will be reviewed. Keep a record of significant approvals so the family and leader can see what was decided and why.
Revisit the authority framework as the office changes. The leader's remit may need to expand as the team grows or contract when family priorities shift. During regular reviews, ask the supervisor and leader to identify recurring delays and unclear decisions. If the family cannot agree on authority, resolve the question through the governance process before holding the leader responsible for the outcome. Written decision rights let the leader act with confidence while preserving family oversight.
ROLES & RULES - Overall leadership, specific roles, and rules should be agreed upon up front.
Sources: How to Start a Family Office, The Single Family Office. Informational only, not financial, legal or tax advice.